Category: Business

The most important business news, explained in a young, easy to understand way. News that affects young career professionals.

  • IMF expects Pakistan’s govt gross debt to decline by 6.7%

    IMF expects Pakistan’s govt gross debt to decline by 6.7%

    According to projections made by the International Monetary Fund (IMF), Pakistan’s government gross debt will decrease from 77.8 per cent of GDP in 2022 to 71.1 per cent in 2023.

    The predictions for Pakistan’s fiscal year 2022–2023, however, are made using data as of the end of August 2022 and do not take the current floods’ effects into account.

    The net debt for Pakistan is predicted to decrease from 71.5 per cent of GDP in 2022 to 66.1 per cent in 2023, according to the IMF study “Fiscal Monitor, Helping People Bounce Back.”

    According to projections, government revenue will represent 12.4 per cent of GDP in 2023 and 12.8 per cent of GDP in 2024, compared to 12.1 per cent during the same time in 2022.

    The primary balance of the government was predicted by the Fund to be 0.2 per cent in 2023 as opposed to -3.0 per cent in 2022. Furthermore, compared to 2022, 2023 is expected to see a decrease in the government’s overall balance of 4.8 per cent.

  • Apple witnesses highest sales growth in PC segment

    Apple witnesses highest sales growth in PC segment

    Apple MacBooks are increasingly being purchased by more people. Apple’s sales have significantly increased compared to the previous year, despite the fact that it offers the most expensive products in the global tech market.

    This is a blatant example of why customers tolerate the fact that the company sells everything at a heftier price tag but also offers top-notch quality at the same time.

    The PC market experienced a 15 per cent fall in the second quarter of 2022 compared to the same period last year, and it has now repeated itself, according to market researcher International Data Corporation (IDC).

    In 2022, Lenovo continues to dominate the PC industry, followed by HP and Dell. Apple comes in at number four, while ASUS is positioned at the bottom of the top 5. The only firm on the list to experience a 40 per cent growth over that time was Apple; all the others had a decline.

    The most recent IDC report reveals a further 15 per cent decline in PC shipments. For clarity, servers, tablets, and 2-in-1 convertibles are not considered “PCs” in this research; only desktops, laptops, and workstations are.

    Positively, the overall number of shipments to consumers and distributors was 74.3 million, down from the previous quarter but up from Q1.

    In 2022, it was still difficult to find PC components, which led to price increases and higher Average Selling Prices (ASP) for all computers. However, the ASP decreased in Q2 and Q3, which Linn Huang, research vice president of Devices & Displays at IDC, claims is a sign of “a market in retreat.”

  • Pakistani rupee continues to rise for 13th consecutive session

    Pakistani rupee continues to rise for 13th consecutive session

    The Pakistani rupee is strengthening versus the US dollar in the interbank market and increased by more than 0.4 per cent on Tuesday morning.

    During intra-day trading, the rupee was quoted at Rs216.97 at around 10:40 am, up Rs1 or 0.46 per cent against the US dollar.

    On Monday, the rupee continued its upward trend against the US dollar for the 12th straight session and appreciated Rs1.95 or 0.89 per cent to settle at Rs217.97.

    The Monetary Policy Committee (MPC) of the central bank maintained its benchmark policy rate at 15 per cent on Monday, which was a significant development.

    However, market observers attribute the rupee’s recent increase to the central bank and other authorities’ efforts to curb market speculation.

    According to Brecorder, the United Nations Development Programme issued a grim warning on Tuesday, stating that there was a debt problem that was rapidly worsening in a number of developing countries, including Pakistan.

    Without prompt assistance, the poverty rate in at least 54 countries would increase, according to UNDP, and “critical investments in climate adaptation and mitigation will not happen.”

    Sri Lanka, Pakistan, Tunisia, Chad, and Zambia are the nations most at risk right now, according to UNDP head economist George Gray Molina.

    In other countries, the dollar loomed big over precarious financial markets on Tuesday, worrying investors with concerns about rising interest rates, global growth, and geopolitical tensions.

    The 20-year high of Rs114.78 that it reached late last month was not far away; the US dollar index was up 0.053 per cent at Rs113.12 at the time.

    An increase in COVID-19 cases in China and a stronger US dollar contributed to Tuesday’s decline in oil prices, a major measure of currency parity, as they sparked worries about a faltering global economy.

  • LC payments up to $50,000 to be released by SBP

    LC payments up to $50,000 to be released by SBP

    Federal Finance Minister Ishaq Dar said that $50,000 in letters of credit (LC) payments that are overdue will be settled this week.

    According to Geo, the decision was made following a discussion with the Governor State Bank of Pakistan (SBP) Jameel Ahmed Dar said that the SBP chief will convey these instructions to clear LCs as a “first step” towards growth next month before departing for Washington DC to meet with International Monetary Fund (IMF).

    Almost 4,400 requests for opening LCs, a payment mechanism used in international trade to provide an economic guarantee from a creditworthy bank to an exporter of goods, will be deducted after these decisions, according to the speaker, who revealed that there were a total of 7,952 cases still pending.

    For certain imports, including completely knocked down (CKD) vehicles, telephones, and various types of machinery, the SBP previously required prior approval before opening LCs or registering contracts. However, these directives were given on May 20.

    The Finance Minister also made it clear that Pakistan will not be refinancing its loans through the Paris Club. According to him, Pakistan will make sure to make timely payments to multilateral organisations for its national sovereign debt obligations. He claimed that in this regard, a strategy had been developed.

  • PFA seizes 1,600 kg outdated meat and expired edibles during a raid in Lahore

    PFA seizes 1,600 kg outdated meat and expired edibles during a raid in Lahore

    On Saturday, the Punjab Food Authority (PFA) foiled an attempt to move a massive stock of unhygienic and expired food from cold storage to some other facility.

    According to The News, PFA Director General Mudassar Riaz Malik and an enforcement team raided a cold storage at Bhobatian Chowk, Lahore based on vigilance-based evidence, and they seized a vehicle (a chiller truck) that was entirely loaded with 1,600 kg of outdated meat, 150 kg of expired butter, and 20 kg of cheese.

    He claimed that unhealthy food was being transported around just to avoid the PFA’s action, however the officials were able to foil the fraud mafia’s plans. Selling or providing expired stock along with new food is illegal and deceptive, according to the PFA DG.

    He asked everyone in the food industry to work with the PFA to comply with the law and fulfill the objectives of the reform.

  • Approaching Paris Club for funds would be my last resort: Ishaq Dar

    Approaching Paris Club for funds would be my last resort: Ishaq Dar

    The Federal Minister of Finance and Revenue, Ishaq Dar, said on Friday that approaching the bilateral Paris Club creditors for debt relief would be his final option since rating agencies lower the ratings of countries who approach the Paris Club.

    The country was not looking for or in need of any rescue from commercial banks or Eurobond creditors, according to Dar’s predecessor Miftah Ismail. “Given the climate-induced disaster in Pakistan, we are seeking debt relief from bilateral Paris Club creditors,” Miftah said.

    “We plan on doing business and investors hesitate when countries seek relief from bilateral Paris Club creditors,” Dar said during an interview.

    Dar responded to Moody’s decision to lower the Government of Pakistan’s senior unsecured debt rating from B3 to Caa1 by saying that the rating agency had taken a discriminating approach against Pakistan from a professional standpoint.

    “Our team spoke to the officials of the rating agency and even I spoke to them personally,” he continued, saying that he had advised them to stay patient for a few days.

    He bemoaned the way Moody’s had presented Pakistan as, God forbid, being in default.

    Dar stated that efforts will be made to fulfil the conditions set forth by his predecessors in reference to his meeting with IMF employees later this month.

    “I have solutions to present in front of the fund members in order to convince them of my decision regarding the petroleum prices,” he said.

    According to Geo, the government lowered the price of petrol by Rs12.63 a litre last week, which brought much-needed relief to the nation’s inflation-stricken citizens and raised concerns over the current IMF programme.

    The finance minister explained the rupee-dollar parity by expressing optimism that the value of the rupee will go below the 200-point mark against the US dollar in the upcoming days.

  • ‘Nothing to worry about’: Dar dismisses concerns raised by Moody’s downgrading Pakistan

    ‘Nothing to worry about’: Dar dismisses concerns raised by Moody’s downgrading Pakistan

    After Moody’s Investors Service downgraded Pakistan’s sovereign credit rating on Friday, Finance Minister Ishaq Dar dismissed worries, stating there is ‘nothing to worry about’.

    “There is nothing to be worried about, I spoke with Moody’s yesterday and told them that they shouldn’t have done this. They should have consulted with us,” said Dar while talking to the media.

    The announcement follows Moody’s Investors Service’s (Moody’s) Thursday night downgrading the government of Pakistan’s senior unsecured debt rating from B3 to Caa1 for both local and foreign currency issuers.

    According to Express Tribune, the senior unsecured MTN program’s rating was similarly reduced by Moody’s, moving from (P) B3 to (P) Caa1. The future remains bleak.

    In the wake of the terrible floods that have struck the nation since June 2022, the rating agency said that the decision to lower the ratings to Caa1 was motivated by greater government liquidity, external vulnerability risks, and higher debt sustainability risks.

    The floods have significantly increased the need for social spending, compounded Pakistan’s problems with liquidity and external credit, and negatively impacted government revenue.

    According to the rating agency, Pakistan’s long-standing credit weakness of extremely weak debt affordability would continue for the foreseeable future.

    However, the Ministry of Finance vehemently contested Moody’s rating decision in its reaction. “The rating action by Moody’s is strongly contested by the Ministry of Finance as the rating action by Moody’s was carried out unilaterally without prior consultations and meetings with our teams from the Ministry of Finance and State Bank of Pakistan,” a statement issued by the ministry said.

    “Following Moody’s intimation of the rating action, the ministry held two meetings with the agency’s team over the past 24 hours, sharing data and information which clearly show a picture contradicting Moody’s rating action.

    “After a regular stock take of the economic and fiscal conditions, the Ministry of Finance informed that government policies over the last few months have helped in fiscal consolidation,” the ministry added.

    “The government had adequate liquidity and financing arrangements to meet its external liabilities.”

    Dar said that Fitch Ratings recently downgraded the UK from stable to negative. “The ratings from these agencies is essential for issuing bonds and Sukuks in the international market,” he said. He claimed that he informed Moody’s that if the organisation did not change its mind, he would provide a “befitting” response at his meeting with its representatives set for next week.

    “They (Moody’s officials) have to meet me. I told them if you don’t [reverse] this, I will give you a befitting response in our meeting next week,” he said.

  • ADB to provide up to $2.5 billion under flood relief support to Pakistan

    ADB to provide up to $2.5 billion under flood relief support to Pakistan

    The Asian Development Bank (ADB) announced on Wednesday that it would provide support of $2.3–2.5 billion for relief efforts in the wake of disastrous floods that have left Pakistan severely damaged.

    The declaration was made during a meeting between Pakistan’s ADB Country Director Yong Ye and Finance Minister Ishaq Dar, as per a press release from the Finance Division.

    Ye offered his condolences for the loss of life and property as a result of the floods during the meeting and congratulated Dar on taking office.

    According to Dawn, the Balochistan Rural Development and Community Empowerment Programme would receive $1.5 billion of the promised aid, according to the ADB country director, and the request will be presented to the bank’s board this month.

    According to a press release, it was discussed that the Country Partnership Strategy for Pakistan 2021–25 is in accordance with the government of Pakistan’s vision.

    The finance minister was quoted as saying that he welcomed the delegation and valued ADB’s assistance in advancing sustainable development in the nation. Dar also informed the delegation of the flood’s damages and financial consequences.

    The administration had stopped the economy’s slide and put it on the correct course with its “pragmatic policy initiatives,” he continued while acknowledging that the economy still faced enormous obstacles.

    The finance minister also gave the ADB team an overview of the government’s priorities.

    Dar hailed the ADB delegation for their steadfast support and assured them of full government cooperation for the expeditious implementation of the current and new programmes.

  • Pakistan did not breach any of IMF conditions by reducing petrol price: Aisha Ghaus Pasha

    Pakistan did not breach any of IMF conditions by reducing petrol price: Aisha Ghaus Pasha

    Following the government’s decision to lower the price of petroleum products, Minister of State for Finance and Revenue Aisha Ghaus Pasha gave the assurance that Pakistan had not violated any of the terms set forth by the International Monetary Fund (IMF).

    According to Geo, there have been numerous rumours surrounding the future of the IMF contract ever since Finance Minister Ishaq Dar cut the price of gasoline last week.

    Since he was sworn in, Dar and his predecessor Miftah Ismail were unable to cooperate because they held divergent views on the IMF agreement and the gradual elimination of gasoline subsidies.

    Pasha responded to the worries by stating that Pakistan had some margin, which the government utilised to relieve the people by lowering the price of gasoline by Rs12.63 per litre.

    She said that the government is still committed to the IMF programme and intends to provide relief to the flood hit masses without tampering IMF conditions.

    Moreover, she said that the government officials are scheduled to meet IMF representatives this month and both sides will discuss things in detail.

    Speaking of the rupee-dollar controversy, she said that the central bank is investigating eight known banks in this issue regarding the banks involved in currency manipulation. Strict action will be taken against any bank found guilty according to Pasha.

    Earlier, the Senate Standing Committee on Finance had summoned the representatives of eight commercial banks that were issued show-cause notices by the central bank on suspicion of currency manipulation.